If you’re looking for ways to make it easier for entrepreneurs to succeed in Minnesota, the Kauffman Foundation has a list for you.
The Kansas City foundation has been studying entrepreneurship in the United States for many years and just put out two reports focusing on how states and local communities can make things easier.
States and their citizens are better off encouraging the formation and growth of new companies, rather than pursuing the timeworn and cost-ineffective approach of competing for the headquarters and/or expansions of existing firms (sometimes referred to as “smokestack chasing”).
The evidence is clear: Entrepreneurial growth is key to the growth of net new jobs and of major advances in living standards.
So. How to make that happen exactly?
The foundation runs through a number of legal and other shifts states can consider:
–Speed commercialization of university-born ideas.
–Create new health insurance options for entrepreneurs.
–Cut or streamline regulatory hurdles like occupational licensing requirements and business registrations.
–Be lenient in enforcing employee non-compete agreements, encouraging mobility.
–Encourage and allow credit unions to finance start-ups more actively.
–Regarding taxes, keep it simple, but not necessarily low. Research seems to indicate entrepreneurial activity is depressed more by complex rules and incentives that skew the market than by the tax rates themselves.
But the foundation also argues that more nebulous cultural changes are important and offers a few more recommendations for both state and local policy makers:
1) Welcome immigrants. From 1995 to 2006, they created a quarter of all technology and engineering firms in the nation. “There is nothing to stop a state from branding itself as
immigrant-friendly, as one that is welcoming to immigrants who study in public universities, start companies, and so on.”
2) Build networks of entrepreneurs and funders. Research is showing that access to other entrepreneurs, potential employees, potential professional service and potential funders is more important than money.
3) Celebrate success. Tell the stories over and over of successes that build the idea that entrepreneurship is an accepted pursuit.
4) Measure it. Build your own set of metrics that includes a variety of these criteria.
You can find a summary of the two reports and links to pdf files here.